Fifth Third Bancorp (FITB) Risk Factor Changes

The preparation of consolidated financial statements in conformity with U.S.

States throughout Fifth Third’s footprint have taken actions or proposed measures to limit the state’s ability to do business with financial institutions or other businesses identified as discriminating against certai…

There is continued focus, including from governmental organizations, regulators, investors, customers and other stakeholders, on environmental, social, governance and sustainability issues.

Fifth Third owns, or owns a minority stake in, as applicable, several businesses, investments and other assets that, in the future, may no longer be aligned with Fifth Third’s strategic plans or regulatory expectations.

Fifth Third has significant investments in bank premises and equipment for its branch network and expects to continue investing in physical branches, as well as its retail work force and other branch banking assets.

Fifth Third may make strategic investments and may expand an existing line of business or enter into new lines of business to remain competitive.

Fifth Third’s ability to deliver strong financial performance and returns on investment to shareholders will depend in part on its ability to expand the scope of available financial services to meet the needs and dema…

Market conditions can also affect Fifth Third’s contractual obligations related to residential mortgage loans sold to various parties, including government-sponsored enterprises and other financial institutions for in…

Fifth Third’s stock price has been volatile in the past and several factors could cause the price to fluctuate substantially in the future.

Global financial markets, including the U.S., face political and economic uncertainties (such as recent budget deficit concerns and political conflict over legislation to raise the U.S.

Global and domestic political, social, economic and public health uncertainties and changes may adversely affect Fifth Third.

Fifth Third has been, and will continue to be, impacted by general business and economic conditions in the U.S.

The Bancorp must maintain certain risk-based and leverage capital ratios as required by the FRB which can change depending upon general economic conditions and the Bancorp’s particular condition, risk profile and grow…

Fifth Third and other financial institutions are highly regulated and subject to extensive oversight, supervision and examination by regulators and self-regulatory entities.

Bank failures may create market volatility and regulatory uncertainty which could have a material adverse effect on Fifth Third’s business and financial condition.

Fifth Third cannot predict whether or what pending or future legislation will be adopted or the impact of any such new legislation on Fifth Third.

Fifth Third is subject to extensive federal and state regulation, supervision and legislation that govern almost all aspects of its operations and limit the businesses in which Fifth Third may engage.

Fifth Third is also subject to risk from potential employee misconduct and in some instances, may be held responsible for the failure of certain third parties, including service providers, vendors, business partners,…

Fifth Third’s success depends, in large part, on its ability to attract and retain key individuals.

Fifth Third has experienced, and may experience again in the future, losses incurred due to customer or employee fraud, theft or physical violence.

Further, Fifth Third may utilize new technology, such as AI, in connection with its business and operations.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, and an established and growing demand for mobile and oth…

New technological advancements, such as AI, may subject Fifth Third to additional risks.

Fifth Third invests significant resources in information technology system enhancements in order to provide functionality and security at an appropriate level for ongoing product development and process re-engineering.

A security breach impacting systems operated by or on behalf of Fifth Third, or the loss or corruption of confidential information such as customer data, business results, and transaction records could adversely impac…

Additionally, Fifth Third uses third- and fourth-party providers to host data, products, services, systems or platforms for Fifth Third, or in some cases to provide services to Fifth Third domestically and internation…

Fifth Third and its service providers are exposed to cybersecurity risks, including risk of cyber-attacks and other information security breaches, which create both operational and reputational risk for the Bank and i…

The Bancorp is a separate and distinct legal entity from its subsidiaries and typically receives substantially all of its revenue from dividends from its subsidiaries.

•reductions in one or more of Fifth Third’s agency ratings;

Inability to refinance in public or private capital markets could cause a default that impacts Fifth Third borrowers.

Fifth Third has exposure to counterparties in the financial services industry and other industries and routinely executes transactions with such counterparties, which may expose Fifth Third to credit risk in the event…

The risks and uncertainties listed below present risks that could have a material impact on the Bancorp’s business, financial condition or results of operations.

If enhanced levels of scrutiny and escalation from its regulators continues, it could negatively impact Fifth Third’s business activities as its regulators perform reviews of, among other things, its liquidity, capita…

The U.S.

Bank failures may create significant market volatility and regulatory uncertainty which could have a material adverse effect on Fifth Third’s business and financial condition.

Concerns over the long-term impacts of climate change have led and may continue to lead to governmental efforts around the world to mitigate those impacts.

Societal responses to climate change could adversely affect Fifth Third’s business and performance, including indirectly through impacts on Fifth Third’s customers.

Activists have historically targeted financial firms with public criticism for their relationships with clients that are engaged in certain industries (such as those which are carbon intensive), including businesses w…

While Fifth Third has sustainability and corporate responsibility initiatives, there can be no assurance that regulators, customers, investors and employees will determine that these programs are sufficiently robust.

risks described above, may result in negative public opinion at large (or with certain segments of the public) and may damage Fifth Third’s reputation.

Fifth Third’s actual or alleged conduct in activities, such as certain sales and lending practices, data security, operational resiliency, corporate governance and acquisitions, inappropriate behavior or misconduct of…

Fifth Third is a diversified financial services company.

Fifth Third has businesses other than banking that are subject to a variety of risks.

Fifth Third may sell or consider selling one or more of its businesses or investments.

After completing an acquisition, Fifth Third may find that certain material information was not adequately disclosed during the due diligence process or that certain items were not accounted for properly in accordance…

Difficulties in identifying suitable opportunities or combining the operations of acquired entities or assets with Fifth Third’s own operations or assessing the effectiveness of businesses in which Fifth Third makes s…

Fifth Third has significant investments in bank premises and equipment for its branch network including its 1,089 full-service banking centers and 102 properties that are developed or in the process of being developed…

This increasingly competitive environment is primarily a result of changes in customer preferences, regulation, changes in technology and product delivery systems, as well as the accelerating pace of consolidation amo…

Fifth Third’s mortgage banking net revenue can be volatile from quarter to quarter.

Third’s performance.

Fifth Third’s income and cash flows depend to a great extent on the difference between the interest rates earned on interest-earning assets such as loans and investment securities and the interest rates paid on intere…

Fifth Third has been, and will continue to be, impacted by general business and economic conditions in the U.S.

The FDIC maintains a Deposit Insurance Fund (“DIF”) to protect insured depositors in the event of bank failures.

Deposit insurance premiums levied against the Bank could increase further if the number of bank failures increase or the cost of resolving failed banks increases.

The Bancorp is subject to the stress capital buffer requirement and must maintain capital ratios above its buffered minimum (regulatory minimum plus stress capital buffer) in order to avoid certain limitations on capi…

Fifth Third is expected to oversee the legal and regulatory compliance of its business endeavors, including those performed by third-party service providers, business partners, customers, other vendors and certain com…

Fifth Third could face serious negative consequences if its third-party service providers, business partners, customers or investments fail to comply with applicable laws, rules or regulations.

Fifth Third and other financial institutions are highly regulated and subject to extensive oversight, supervision and examination by regulators, including the FRB, OCC, FDIC, CFPB, SEC, CFTC, FINRA, the National Futur…

Failure by the Bancorp or the Bank to meet the applicable eligibility requirements for FHC status (including capital and management requirements and that the Bank maintain at least a “Satisfactory” CRA rating) may res…

It is anticipated that the Trump administration will promulgate a number of executive orders and propose legislation that could directly impact the regulation of the financial services industry, many of which may mark…

Fifth Third may be required to repurchase residential mortgage loans or reimburse investors and others as a result of breaches in contractual representations and warranties.

In addition, there has been a trend of public settlements with governmental agencies that may adversely affect other financial institutions, to the extent such settlements are used as a template for future settlements.

for all legal proceedings where it faces a risk of loss.

Fifth Third faces operational risk from the effects of climate change as an increase in severe weather may cause closures, damage to infrastructure or damage to Fifth Third’s physical locations or other assets that ma…

Fifth Third may experience operational disruption from the effects of climate change.

Any failures or disruptions of the Bancorp’s systems or operations could give rise to losses in service to customers and clients, adversely affect the Bancorp’s business and results of operations by subjecting the Ban…

Bancorp’s control, which may include, for example, security breaches; electrical or telecommunications outages; failures of computer components or servers or other damage to the Bancorp’s property or assets; natural d…

Third-party service providers with which the Bancorp does business both domestically and offshore, as well as vendors and other third parties with which the Bancorp’s customers do business, can also be sources of oper…

Fifth Third’s necessary dependence upon automated systems to record and process its transaction volume poses the risk that technical system flaws or employee errors, tampering or manipulation of those systems could re…

Fifth Third’s operations, including its financial and accounting systems, use computer systems and telecommunications networks operated by both Fifth Third and third-party service providers.

Fifth Third relies on its systems and certain third-party service providers and certain failures (including those related to cybersecurity or weather events exacerbated by climate change) could materially adversely af…

If personal, confidential or proprietary information of customers or clients in the Bancorp’s or such vendors’ or other third-parties’ possession were to be mishandled or misused, the Bancorp could suffer significant…

proactively address these techniques or to implement adequate preventative measures.

There will always be efforts on the part of threat actors to breach information security at financial institutions or with respect to financial transactions.

In today’s digital world, more and more of Fifth Third’s business is conducted primarily via digital and mobile technology and information management systems.

Other rating agencies may also take actions to downgrade their ratings of the securities issued by Fifth Third or its subsidiaries.

Additionally, a downgrade of the credit rating of any particular security issued by Fifth Third or its subsidiaries could negatively affect the ability of the holders of that security to sell the securities and the pr…

on its securities are also influenced by, among other things, the credit ratings that it, its subsidiaries and/or its securities receive from recognized rating agencies.

Fifth Third’s ability to access the capital markets is important to its overall funding profile.

If Fifth Third is unable to continue to fund assets through customer bank deposits or access capital markets on favorable terms or if Fifth Third suffers an increase in borrowing costs or otherwise fails to manage liq…

A reduction in Fifth Third’s credit rating could adversely affect its ability to retain deposits, borrow funds (including by raising the cost of borrowings substantially) and could cause creditors and business counter…

Additionally, the impact of widespread health emergencies may adversely impact Fifth Third’s results of operations, such as the impacts previously experienced from the COVID-19 pandemic.

Fifth Third’s footprint stretches from the upper Midwestern to lower Southeastern regions of the U.S.

The effects of global physical climate risks, severe weather events or health emergencies may have an effect on the performance of Fifth Third’s loan portfolios, thereby adversely impacting its results of operations.

Fifth Third’s credit risk and credit losses can increase if its loans are concentrated among individual borrowers, borrowers engaged in the same or similar activities, industries or geographies, or to borrowers who as…

Fifth Third may have more credit risk and higher credit losses to the extent loans are concentrated by exposure to individual borrowers or the location or industry of borrowers or collateral.

Fifth Third believes that both the ALLL and the reserve for unfunded commitments are adequate to cover expected losses at December 31, 2024.

Fifth Third may underestimate the credit losses expected to be incurred in its portfolios and have credit losses in excess of the amount reserved.

Fifth Third reserves for credit losses by establishing reserves through a charge to earnings.

When Fifth Third lends money or commits to lend money, the Bancorp incurs credit risk, or the risk of loss if borrowers do not repay their loans, leases, credit cards, derivative obligations or other credit obligations.

As a result of the Comerica Merger, existing customers, suppliers and other business partners of Fifth Third and of Comerica could decide to no longer do business with Fifth Third, reducing its anticipated benefits.

Following completion of the Comerica Merger, Fifth Third may be subject to business uncertainties that could adversely affect Fifth Third’s business and operations.

In addition, following the Comerica Merger, Fifth Third may be subject to increased scrutiny by, and/or additional regulatory requirements of, governmental authorities as a result of the Comerica Merger or the size, s…

Following the Comerica Merger, the size and scope of Fifth Third’s business will increase beyond its current size and scope.

Fifth Third’s future results may suffer if Fifth Third does not effectively manage its expanded operations following the Comerica Merger.

If Fifth Third fails to realize the anticipated benefits of the Comerica Merger, or if those benefits take longer to realize than expected, it could have an adverse effect on its business, financial condition and resu…

perform relative to its expectations, and that Fifth Third may not achieve the benefits it expects, which could, among other things, also result in a write-down of goodwill and other intangible assets associated with…

There can be no assurance that Fifth Third will be able to accurately anticipate and respond to the changing demands it will face as it continues to expand its operations or that it will be able to achieve further gro…

The success of the Comerica Merger, including anticipated benefits and cost savings, will depend, in part, on Fifth Third’s ability to successfully integrate Comerica’s operations in a manner that results in various b…

Fifth Third may fail to realize the anticipated benefits of the Comerica Merger, including, among other things, anticipated revenue and cost synergies, due to factors that may be outside either party’s control, includ…